Progressive Corp., the fourth- largest U.S. car insurer, said profit rose 27 percent as margins improved for a second straight period.
Third-quarter net income climbed to $296.1 million, or 50 cents a share, from $232.4 million, or 39 cents, a year earlier, the Mayfield Village, Ohio-based company said in a statement. Operating profit, which excludes some investment results, was about 46 cents per share, beating by 2 cents the average estimate in a Bloomberg survey of 20 analysts.
Chief Executive Officer Glenn Renwick is seeking customers who allow the company to track their driving habits. The insurer offers a device called Snapshot, which plugs into a vehicle, to identify the safest customers and allow Progressive to offer discounts to help retain their business.
“By collecting more data on how people actually drive, they can construct rates that are lower than other companies actually can match,” Meyer Shields, an analyst at Keefe, Bruyette & Woods Inc., said in an interview before earnings were released. “Progressive knows more about the risk. It knows whether the risk in question is a better or worse-than-average risk.”
The insurer spent 92.5 cents of every premium dollar on claims and expenses, an improvement from costs of 94.2 cents a year earlier. Premium revenue increased 5.5 percent to $4.54 billion from $4.3 billion in the prior-year quarter.
The number of individual auto customers climbed to 9.24 million, a gain of 2.5 percent from a year earlier. That compares with an advance of 1.7 percent in the 12 months ended Sept. 30, 2013.
Book value, a measure of assets minus liabilities, climbed to $11.77 a share, an increase of 2.5 percent from $11.48 on June 30. Net investment gains widened to $38.2 million from $27.9 million in last year’s third quarter.
Progressive advanced 0.6 percent to $25.42 at 9:33 a.m. in New York.
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